Air fares hike justified says Praful Patel

New Delhi, Aug 2: The government today justified the increase in domestic air fares five times in the past three years and international fares by six times in two years saying commercial organisations have to act on business principles.

The cost of operations rose because of abnormal increase in fuel prices from Rs 27,000 per kilo litres two years ago to Rs 43,600 per kilo litre today, Civil Aviation Minister Praful Patel told the Lok Sabha.

''Both Air India and Indian Airlines are commercial organisations have to act on business principles. In order to remain competitive, they also introduce market driven schemes taking into account factors like competition, seasonality, supply and demand equation, etc.,'' he said during Question Hour.

He, however, said taxes levied by the states should also come down for reducing the fares. The Central Excise rates have already been reduced from 16 per cent to 8 per cent, he added.

He maintained that Air India has not carried out any fare hike during the last three years and in fact, the fares have declined by an average 2-3 per cent on Air India network.

Air India, however, has resorted to increase in levy of fuel surcharge from June 2004 in line with route-specific surcharge levied by other foreign carriers, he added.

Mr Patel agreed to look into the high fare between Delhi and Bhubaneswar, but said the Ministry never interferes in fixing of air fares.

Domestic air travel sector is growing fast with a growth of 50 per cent last year, he said.

The growth has also led to shortage of pilots, he said adding the need of the hour was producing indigenous pilots.

On modernisation of airports across the country, Mr Patel said the state-run Airports Authority of India (AAI) would be the nodal agency to carry out the work. Thirty-five non-metro airports in different states have been identified for modernisation, he said adding it would facilitate growth of these cities.

The modernisation of the 35 non-metro airports will be completed by 2010-11, he added.

The Ministry would resolve the issues relating to modernisation of the Chennai and Kolkata airports soon so that work could be completed along with other metro airports, Mr Patel said.

UNI